ALLIED JEWISH FEDERATION OF COLORADO JEWISH COMMUNITY FOUNDATION OF COLORADO Notes to Combining Financial Statements Note 1 - Nature of the Organization and Summary of Significant Accounting Policies (continued) Basis of Presentation (continued) Board-designated amounts are unrestricted amounts that have been designated by the governing boards for various purposes, including building improvements and general reserves, and for the support or any emergencies of the Jewish community. Temporarily restricted amounts are contributions restricted by donors specifically for certain time periods, purposes, or programs. Permanently restricted amounts are monies that cannot be spent at the discretion of the Entities, but must be maintained permanently by the Foundation as required by the donor. Credit Risk Financial instruments that potentially subject the Entities to concentrations of credit risk consist primarily of cash and cash equivalents, investments, pledges receivable, and notes receivable. The Entities limit their exposure to credit risk by placing their cash and cash equivalents and certain investments in securities backed by the United States government and in instruments issued by quality financial institutions. Amounts are invested in several institutions to minimize risk. From time to time during the year, the Federation exceeded the federally insured limits. The Entities reduce their credit risk related to notes receivable and investments through their involvement and limited oversight over the third-party investors and borrowers. Cash and Cash Equivalents For purposes of the combining statements of cash flows, the Entities consider all cash and short-term instruments with a maturity of three months or less when purchased to be cash equivalents, with the exception of cash and cash equivalents included in the combining balance sheets as part of the investment portfolio. Pledges Receivable Pledges relating to the annual campaign are expected to be collected within 18 months, or at the completion of the campaign, and are recorded at their net realizable value. No discount has been recorded, as these amounts would have been insignificant. An allowance for uncollectible pledges has been established by Federation management based on past collection experience and current economic conditions.
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